A monopolist with total cost 80 - 20Q + Q2 and marginal cost MC = 2Q - 20 faces average revenue (demand) P = 1000 - Q and hence marginal revenue MR = 1000 - 2Q. (a) Calculate the price that the monopolist will charge and the quantity of output. (b) Assume that the government sets a price ceiling at the competitive price. Calculate (i) the quantity supplied by the monopolist (ii) the monopolist's profit. (c) Calculate the deadweight loss from monopoly power in (a)

Survey Of Economics
10th Edition
ISBN:9781337111522
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter8: Monopoly
Section: Chapter Questions
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A monopolist with total cost 80 - 20Q + Q2 and marginal cost MC = 2Q - 20 faces average revenue (demand) P = 1000 - Q and hence marginal revenue MR = 1000 - 2Q.

(a) Calculate the price that the monopolist will charge and the quantity of output.

(b) Assume that the government sets a price ceiling at the competitive price. Calculate

(i) the quantity supplied by the monopolist

(ii) the monopolist's profit.

(c) Calculate the deadweight loss from monopoly power in (a)

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